November 2007

First Nations key to continued mining growth

By
D. Zlotnikov

As the rash of new mining projects in Saskatchewan continues to challenge the provinces’ ability to keep up, relief may come from the very same remote areas in which mining developments most often end up. Instead of trying to attract skilled labour in an ever-more competitive market, companies would be wise to look to the local First Nations communities for both workers and contract service providers.

Dealing with the aboriginal bands is a different experience from what most mining firms are used to, but the rewards are well worth it, said vice president and general manager of Northern Resource Trucking Limited Partnership (NRT), Dave McIlmoyl. NRT, McIlmoyl said, has been providing the vast majority of trucking services to uranium producers AREVA Resources Canada and Cameco Corporation.

“We’re on our second five-year exclusive contract with AREVA and have finished a six-year contract, a five-year contract, and are now on our second five-year contract with Cameco,” he explained—quite an achievement for a company that started the journey in 1981 with six gravel trucks.

As McIlmoyl said, the company’s path to success began when the Key Lake Mining Corporation was looking for a freight hauler to service its uranium mine. Key Lake’s land lease stipulated that a portion of the benefits from the development go to the residents of Saskatchewan’s North. “Those happen to be about 85 per cent aboriginals.” Because of this stipulation, Key Lake sought out aboriginal-owned contractors and placed very specific requirements on them. Aboriginal-owned Kitsaki Development Corporation has been operating a small freight hauling company for two years, but could not provide the necessary capacity to meet Key Lake’s needs. At the mining company’s suggestion, Kitsaki approached the much larger - but at the time exclusively bulk haul - carrier firm, Trimac Transportation. The result was a new company, Northern Resource Trucking, 51 per cent owned by Kitsaki (which was at the time wholly owned by the Lac La Ronge Indian Band), and 49 per cent owned by Trimac.

By 1986, the newborn company was hauling freight for Key Lake (soon to become part of Cameco) and AREVA (then Cogema Resources Inc.) but was struggling under the burden of the special requirements placed on it.

“We were required to offer benefits to the northern communities, to offer training programs to the northern residents,” said McIlmoyl. “This put us at a competitive disadvantage and we had a very difficult time competing for the contracts. So in 1994, we approached Cameco and asked for an exclusive, long-term contract for all their freight, and if we had that, we would be able to offer a better training program. To our surprise, Cameco agreed.”

While Cameco agreed to the proposal, it wanted to see the benefits spread among more communities than just Lac La Ronge. To that end, the partners agreed to sell off 41 per cent of NRT, spreading out the ownership among 11 other First Nations and Métis partners. Today, Kitsaki retains 30 per cent of the company, Trimac owns 29 per cent, a company representing the three Dene First Nations holds 20 per cent, and seven other partners own 3 per cent each.

The company, with its newly diversified ownership, was on a much firmer footing, and better prepared to meet Cameco’s training program requirements. In fact, that program has been growing and is on the verge of becoming an added source of revenue for NRT.

Originally, the company had “contracted the Saskatchewan Institute of Applied Science and Technology to come in with their trucks and their instructors and do the training,” McIlmoyl recalled. “Once the guys had a 1A license, we’d do in-cab training with them for a year or so.”

Now, the company has its own government-certified school and instructors, and has expanded beyond trucks.

“We can offer Class 5 training [standard sedan licence], forklift, and school bus driver training, and we’re working on others as well,” said McIlmoyl. “We’re in the process of offering our training services to mining companies, First Nations bands, and local schools—not just our guys anymore. We’ve also had simulators from Northlands College to do heavy equipment training in our facility. We had a diamond drilling class here as well. We’re trying to turn our training program into a profit centre as well as training northern aboriginals for us. And it’s working fairly well.”

Would the company be doing so well if the Key Lake land lease didn’t require that benefits be passed on to the local communities? McIlmoyl doesn’t believe so.

“Without that, you’d have the same thing here that you see everywhere else. All the trucking would be done by the Trimacs and the Westcans. Big mining corporations want to take the path of least risk, which means dealing with big companies.”

However, this is less a case of supporting a minority group and more one of economic foresight. The working-age segment of the aboriginal population is the fastest growing in Canada. This means that in the next few years, more and more aboriginal kids will be looking for work.

“Back when I started with the Lac La Ronge Band, in 1980, most people were still engaged in traditional occupations like hunting and fishing and trapping,” said McIlmoyl. “Today, the majority are part of the wage economy. This is because there just aren’t enough moose and fish left in northern Saskatchewan to support today’s population.”

Such an influx of locally available labour is a potential boon to the mining companies, provided they take the necessary steps in advance. Cameco is an example of a company doing that very thing.